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Explainer: Australian elections 2010

Gillard was born in Wales and became Australia's first female PM after Kevin Rudd stood down

Abbott was born in London and became Leader of the Opposition in December 2009

Election issues include the state of the economy and how to deal with asylum seekers

(CNN) -- Australians go to the polls on August 21, 2010, and will choose between the Australian Labor Party and the Coalition to form a new government.

What's the political system?

The Commonwealth of Australia was created in 1901 when the former British colonies -- now Australia's six states -- agreed to federate. Although Australia is a fully independent parliamentary democracy, Queen Elizabeth II of the United Kingdom is also formally head of state.

All citizens over the age of 18 must vote in both federal and state government elections, and national general election must be held within three years of the first meeting of a new federal parliament.

- the center-left Australian Labor Party (ALP) is historically backed by workers and unions

- the center-right Coalition combines two conservative parties, the Liberal Party of Australia and the Nationals

- the Greens, a much smaller party, is Australia's fourth political entity, which has a strong environmental ethos.

Who are the main candidates?

Julia Gillard was born in Wales in 1961 and moved to Australia with her family in 1966. After graduating with an arts and law degree in Melbourne, she was employed as a solicitor with the law firm Slater and Gordon, becoming a partner in 1990.

Gillard was elected to Parliament in the seat of Lalor, Victoria in 1998 and became deputy prime minister and Minister for Education, Employment and Workplace Relations when Labor was voted into power in November 2007. She became Australia's first female Prime Minister on 24 June 2010 after Kevin Rudd lost support of the Labor Party.

Australian society includes migrants from 200 countries, and indigenous peoples who've inhabited the country for up to 60,000 years

Australia is the only nation to govern an entire continent and is the sixth largest country in the world by land area

Australia has 10 per cent of the world's biodiversity. A great number of its native plants, animals and birds exist nowhere else in the world

Tony Abbott was born in London in 1957. He gained earned his degree at the University of Sydney in economics and law, and went on to become a Rhodes Scholar at Oxford University. He worked as a journalist for publications including The Australian newspaper, and was elected to Parliament in the seat of Warringah in 1994.

Abbott served in numerous posts during the Howard Government (1996-2007), including Minister for Employment Services and Minister for Employment and Workplace Relations. In December 2009 he became Leader of the Opposition.

What happened to Kevin Rudd?

Kevin Rudd was the man considered responsible for bringing the Labor Party back from the wilderness. After 11 years in opposition, the ALP won office in November 2007.

After enjoying some of the highest popularity ratings of any Australian leader, Rudd's poll numbers took a hit after he placed his proposed carbon emissions trading scheme on the backburner. He also introduced a 40 percent tax on the country's powerful and wealthy mining industry.

As the polls began to plummet, many within Rudd's own party believed it could not win the next election with him at the helm. On 24 June 2010, the ALP replaced Rudd with Gillard after he stood aside.

So what are the election issues?

Unsurprisingly, economic issues are at the forefront of the election. Australia has a historically low unemployment rate of 5.1 percent and the country was able to avoid recession during the recent worldwide economic downturn.

Gillard has said that her priorities include keeping the country's economy strong. Abbott said his government would end government waste, repay debts and stop new taxes.

Other contentious issues with voters include the way Australia will deal with asylum seekers, illegal immigrants and people smugglers, and whether it should embrace the Carbon Pollution Reduction Scheme (CPRS).